The turbulence in the global capital markets in August was the first real test since the crisis of 2008 as to whether Latin America had decoupled its economic fortunes from the developed economies of the US and Europe.
Those who argue that the region is more than at any other time in its history insulated from the harsh winds blowing from the developed economies point to the transaction by Mexico last month in which it tapped its century bond for another $1 billion. The successful execution followed two days of heavy falls on the equity markets and demonstrated Mexico’s ability to attract investors amid market volatility.
The sovereign was swift and acted opportunistically from some reverse enquiries. There were also key technical attractions for investors, according to a banker close to the deal. "It had some interesting duration play that was well remunerated and it offered investors convexity, which they were looking for at the time," he says. "But it also sends a very strong signal from the Mexican side that in times of global volatility they continue to have access to funding from different sources. They were creative and they know how to bring transactions that appeal to the market that are very good for both sides."
